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PRIME MINISTER'S MEETING WITH SIRY K PAO OCTOBER 1985

NINGBO STEELWORKS

Line to Take

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THURSDAY, 3

Potentially an important project for UK trade with China

w

grateful to Sir Y

K Pao for drawing it to our attention. Pleased that consortium lead by Davy McKee is undertaking feasibility study.

2 Financing a project of this size (£3 billion) will

will be a major consideration. To what extent will Chinese Government provide finance?

3

HMG has recently agreed in principle that China should be eligible for aid form and volume now being discussed with Chinese authorities. Parts of Ningbo project could be candidates for aid support.

Background

4

Sir Y K Pao (a native of Ningbo with a keen interest in its development) introduced this project to the Prime Minister in November 1984. This was followed up by Lord Young's mission to China and return visit to the UK by Vice Minister (now Minister) for Metallurgy. Davy McKee have formed a consortium to

to pursue the project and are now undertaking a feasibility study with full co-operation of Chinese authorities (DTI considering supporting cost). Total project cost £3 billion with maximum UK content

£1.5 billion.